Personal Injury Damage Calculation
In the wake of an accident or act of willful negligence, the victim may seek restitution through a personal injury claim. To do so, they will first need an accurate personal injury damage calculation to support any litigation. This involves calculating both economic and non-economic damages that may include:
- Medical expenses
- Loss of wages (including loss of potential future wages)
- Property damage
- Additional out-of-pocket costs, like transportation to medical facilities
- Pain and suffering
- Emotional distress
- Loss of enjoyment and consortium
Calculating these damages can be a challenge due to the subjective factors involved. As such, a forensic accounting expert is often brought in to assist with the process.
What Economic and Non-Economic Damages are Part of a Personal Injury Damage Calculation?
There are two categories that personal injury damages may be grouped into. They are economic and non-economic damages. Economic damages include the following:
Medical expenses
Medical expenses typically represent the largest economic factor in a personal injury damage calculation. Any medical bill related to the injury may be included, like hospital stays, any surgeries or other procedures, follow-up doctor visits, ongoing therapy or rehabilitation, and the cost of any prescription drugs.
If the victim’s injuries are expected to cause long-term or chronic complications, the cost of treating these complications will also be grouped into a personal injury damage calculation.
Loss of wages (including future wages)
Damage calculations will also include the value of any back pay that the victim did not receive while missing work. Further, victims are entitled to the value of any wages they will lose as a result of the injury, which may be due to the injury itself or due to the loss of potential job opportunities.
Property damage
If the victim’s property was also damaged in the process, they may be compensated for this as well. For instance, any damage to the victim’s vehicle during a car accident will also be included in the damage calculation.
Additional out-of-pocket costs
Personal injury damage calculations also include additional expenses incurred as a result of the injury. For instance, the plaintiff may be compensated for transportation expenses to a hospital for ongoing treatment. Home modifications (for accessibility), household care and childcare services are additional examples.
Economic damages can be quantified and therefore are straightforward to calculate. However, non-economic damages are based on subjective factors and may include the following:
Pain and physical suffering
Pain and physical suffering are typically included in a personal injury damage calculation. The court will consider the extent and duration of the victim’s pain, and the impact it has on the victim’s daily life.
Emotional suffering
Emotional suffering includes the mental anguish related to the victim’s injury. The court will consider any mental health diagnosis (anxiety, depression, etc.) and professional testimonials when assessing emotional impact.
Loss of enjoyment and consortium
An injury may leave the victim with profound impairments that make it difficult to enjoy life and companionship with others. The victim’s age, family status and the extent of the victim’s injuries are factors when calculating these damages.
In addition to economic and non-economic damages, the court may assess punitive damages against the defendant. These damages are reserved for cases where the defendant’s actions are proven to be intentional or badly negligent. Punitive damages aren’t meant for compensatory reasons, but to prevent the defendant (and others) from committing similar actions in the future.
The Multiplier or Per Diem Method: How Non-Economic Damages are Calculated
Because non-economic damages are inherently subjective to calculate, accounting experts rely on one of two established calculation methods to assess them – the multiplier method or the per diem method. Here’s a brief summary of each method:
- The multiplier method – The multiplier method takes the calculated economic damages and multiplies it by a number, typically between 1.5 and 5. The multiplier is based on the extent of the victim’s injuries, their duration and the impact they have on the victim’s life. For example, if the personal injury claim involves $100,000 in economic damages and the court finds that the victim’s injuries are potentially long term, they may use a multiplier of 4 and determine the non-economic damages to be worth $400,000.
- The per diem method – The per diem method is typically meant for shorter term injuries that the victim is expected to fully recover from. With per diem, the damage calculator is based off the victim’s daily wages or expenses, multiplied by the number of days their recovery is expected to take. For example, if the victim’s daily wages equal $250 and their recovery is projected to take 60 days, the non-economic damages in this case would be $250 x 60, or $15,000.
Common Examples of Personal Injury Cases in Which Damage Calculations may be Needed
Personal injury law covers an array of cases and scenarios. Some of the most common are:
- Vehicle accidents
- Workplace injuries (slips, falls, exposure to hazardous materials, etc.)
- Defective or dangerous products
- Drug injuries
- Medical malpractice
- Assault and battery cases
Essentially, if one party causes injury to another party – and if the injury is the result of carelessness, negligence or a malicious act – then litigation may be warranted, and damage calculations may be needed.
A Forensic Accounting Expert Can Assist with Personal Injury Damage Calculations
Personal injury damage calculations are complex and subjective, given the widespread impact that an injury can have on a person and their family. Still, it’s important for victims to pursue as much as they can during litigation in order to ensure they have enough to cover their future costs.
Forensic accounting experts can guide their clients through the process with proper damage calculation processes and a long-range look at the victim’s financial picture. This will ensure the victim’s case has the litigation support it needs to be a success.
